australian non-resident tax

Tax planning strategy 183

The Australian Bureau of Statistics advises that Australia’s population has grown to 24,274,575 (as at 17th November 2016). The overall total population is increasing at the rate of one person every 1 minute and 29 seconds as the result of:

  • One birth every 1 minute and 44 seconds. 
  • One death every 3 minutes and 20 seconds. 
  • A net gain of one international migration every 2 minutes and 32 seconds.

A total of 91,761 people left Australia permanently in 2012-13, of which 52.7% were born overseas. Overwhelmingly, the Australia-born are emigrating to the United Kingdom, the United States or to New Zealand. In 2012-13, 44.0 per cent of Australian-born emigrants went to one of these three countries. The next most popular destinations were Singapore (10.0 per cent), Hong Kong SAR (5.4 per cent) and the United Arab Emirates (4.6 per cent).

Becoming a non-resident of Australia for tax purposes has the following advantages:

  • Foreign source income of non-residents is not subject to Australian tax.
  • Fringe benefits provided to a non-resident with foreign source remuneration does not give rise to FBT liability in Australia.
  • Interest, dividends and royalties paid to a non-resident are subject to a final withholding tax (at rates between 0 - 30%). 
  • An employer is not required to pay superannuation guarantee contributions if the employee is a non-resident working outside Australia.

No capital gains tax paid on Australian shares, only Australian property. 

An individual migrating overseas may still be deemed an Australian tax resident and subject to Australian tax. Expert advice is required to become a non-resident for Australian tax purposes that satisfies the ATO—Australian Taxation Office.